Federal investigators suggest that General Motors (GM) acted criminally when the automaker did not disclose the ignition defects in its cars, which killed more than 100 people.
The car maker is held for criminal wrongdoing as GM executives admitted that they were aware of the ignition issues as early as 2001 but did not take steps to fix the problem as it was too expensive.
The company is said to be negotiating the penalty sum with the Justice Department. The New York Times cites people who were briefed about the inquiry and reports that the penalty may exceed $1.2 billion. In 2014, the same amount was paid by Toyota for hiding unintended acceleration problems.
Moreover, GM will also have to pay the victims or their families and will also have to bear the cost of replacing about 2.6 million ignition switches.
An internal investigator found that GM wanted the ignition switches to feel like the one on sports cars. The faulty switches can shut off the engine, which in turn switches off the power steering and power breaks. The driver loses control of the car, resulting in an accident. Moreover, when the engine switches off, it prevents the airbags from being inflated, providing less protection for the driver and other passengers in the car.
GM has fired a number of its employees. Some of these former employees are also under the scanner by the Feds and may also face criminal charges.
Mary Barra, CEO of GM, has addressed the issue and apologized for the ignition switch problem.
"This should have never happened. It is simply unacceptable," stated Barra. "The report concludes that from start to finish, the Cobalt saga was riddled with failures, which led to tragic results for many."
It remains to be seen how much GM will be penalized for its ignition switch problem, which the company had concealed for more than a decade.
Photo: jm3 | Flickr
